【Column Article】“Health Insurance Reform Must Confront Human Nature — On Co-Payments and User Fees”

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2025/10/31

By Prof. Lee Po-Chang, Chair Professor, College of Public Health, Taipei Medical University Originally published in Liberty Times — Free Forum

When discussing the sustainability of Taiwan’s National Health Insurance (NHI), let’s be honest—having more money would of course make things easier. The real question is: where will the money come from? Managing NHI finances is like running a large corporation—one must face reality pragmatically. Now in its 30th year, the NHI is confronting structural challenges: the exodus of physicians and nurses from emergency, critical, and rare-disease specialties; insufficient premium revenue; imbalanced professional reimbursements; and distorted resource allocation. To endure, the system needs not just more funding—but management wisdom and an understanding of human nature.

Although the NHI’s annual revenue and expenditure are approaching NT$1 trillion, the efficiency of this massive fund distribution is increasingly unable to meet the healthcare system’s needs. Outpatient services consume 70% of total spending, while inpatient care receives only 30%. Primary care resources remain inadequate, making chronic disease management difficult, while medical centers are overcrowded with minor cases. Many people habitually “go straight to large hospitals to see famous doctors,” thinking, “The NHI will cover it—tests are free and medicine is cheap.” As a result, medical center staff are severely overburdened.

The Key to Hierarchical Medical Care Is Trust, Not Punishment

Every patient naturally wants the best doctor—that’s human nature. If the public lacks trust in primary care physicians, no amount of education will change patient behavior. To make hierarchical medical care work, primary care must first become trustworthy—accurate diagnoses, attentive service, and smooth referrals. People need to know: “Minor illnesses can be treated here; serious ones will be referred properly.”

During my time leading the NHI Administration, we established the NHI MediCloud system, a milestone that allowed patients at local clinics to access imaging and data from medical centers. We also built strategic alliances among healthcare networks. With the help of former Education Minister Pan Wen-Chung and Hanlin Publishing, the concepts of hierarchical medical care and user co-payment were even included in the fifth-grade Chinese textbooks. We had a solid plan—the question is whether the authorities have made good use of these foundations to communicate the importance of NHI reform.

User Fees vs. Co-Payments — A Fundamental Difference

In fact, the two concepts differ significantly. Under the NHI Act, a co-payment applies to the level of care—for example, patients who go directly to a medical center without a referral must “pay an additional fee.”

By contrast, what we once proposed—user fees as a form of co-payment—focuses on behavioral responsibility, especially regarding diagnostic tests and examinations. Patients often say at large hospitals, “Please run a few more tests while I’m here,” believing that “the more tests, the safer I’ll feel.” This mindset endlessly dilutes medical resources and drives more people toward large hospitals.

If patients understood that every test has a cost—and if co-payments reflected usage behavior rather than institutional level—we could curb over-treatment and redirect care back to the primary level. This policy once received full support from Premier Su Tseng-chang and enjoyed over 80% public approval. I was deeply moved by Premier Su’s courage. Unfortunately, the COVID-19 pandemic disrupted the already-announced plan, which ultimately came to nothing. Now, the government is reintroducing the “original version” of co-payment reform from thirty years ago—sociologists may have much to say about this revival.

The Sustainability of NHI Cannot Rely on Legislation Alone

Administrative compliance with the law is the foundation of reform—but the vitality of a system comes from the hearts of the people. I believe the success of the NHI depends on being a system that understands human nature.

When users are willing to pay a reasonable share, when primary care physicians earn public respect, and when medical centers focus on critical and severe cases, the entire system can return to balance.

NHI should not merely be a nationwide medical bill shared by all, but rather a social contract collectively protecting the health of the people.

Original source: https://talk.ltn.com.tw/article/paper/1730255?utm_medium=APP&utm_campaign=SHARE&utm_medium=APP